fica

Defining FICA – a brief overview of FICA
For detailed information, in-depth FICA training, various agent compliance questionnaire templates, MM RMPC and a RMPC templet for agents, please scroll down to the links at the bottom of the overview.

What is FICA

The Financial Intelligence Centre Act applies to everyone and is compulsory for individuals and businesses alike in SA. This law was passed to help detect and prevent financial crimes such as money laundering, terrorist financing, and fraud and in SA. The Financial Intelligence Centre (FIC) is the body responsible for overseeing and enforcing the Act. FICA forms part of a larger system to ensure a lawful financial environment in SA.

Why we need to comply

The FICA law require all businesses involved in the financial sector of the economy to implement measures to verify client’s identities and to establish the source of their funds. In some special cases, the investigation has to go even further to identify the source of their wealth, i.e. how they built up their estate. These compliance obligations are even more onerous when dealing with companies, CC’s and trusts.

Accountable Institutions – professionals and businesses who handle financial transactions

FICA aims to ensure that these accountable institutions must:

Verify the legitimacy of those who they are transacting with
Report any suspicious activity to the FIC

The accountable institutions who have to register and adhere to FIC includes:

Financial services providers i.e. banks, financial institutions, Crypto asset service providers
Legal Practitioners, i.e. Attorneys, Conveyancers, Advocates, Notaries
Property Practitioners (estate agents)
Accountants, Insurers
Trust and company service providers
High Value goods Dealers
Casinos and gambling operators
Foreign Exchange Dealers
Investment Advisors/Brokers
Accountants, Auditors, Credit Providers, Lenders and in certain capacities, Tax Practitioners

These accountable institutions have accountability to the FIC by

Registering with FIC
Implement a RMCP (Risk Management and Compliance Programme) – see an example templet when scrolling down
Conducting customer due diligence before any transaction can proceed
Reporting suspicious transactions
Maintain records of clients and transactions

Failing to comply – consequences

Accounts being frozen
Delays in property transfers and business transactions
Refusal of service by financial or legal institutions
Fines of up to R10 million for individuals and R50 million for legal entities
Criminal prosecution in extreme cases of wilful non-compliance

What is a FICA policy – applicable to the accountable institutions

If you operate as an accountable institution, you are required to have an internal FICA policy in place and must develop and implement a formal Risk Management and Compliance Programme (RMCP). This effectively acts as the institution’s operational FICA policy. It is your obligation to identifying clients, risk assessment, record keeping and reporting of suspicious transactions.

This policy must be tailored to the actual size, nature and complexity of the business and should include:

How clients are identified and verified
Criteria for assessing client risk levels
Processes for ongoing due diligence
Internal reporting procedures for suspicious transactions
Record-keeping and document retention standards
Staff training protocols to ensure consistent application

How to register with FIC online

Create a profile on their goAML portal
Provide detailed organisational and contact information
Appoint a compliance officer
Set up reporting capabilities for suspicious or reportable transactions

Once registered, you are expected to keep your information up to date and comply with all FICA-related reporting and administrative requirements.

The FICA verification Process

Verification involves two main sections:

Identification — establishing who the person or entity is
Verification — confirming that the details provided are authentic and current

For individuals:

A valid South African Identification Document or passport (for foreign nationals)
Verification of residential address not older than 3 months, such as a recent utility bill, lease agreement, or bank statement

For legal entities:

The process is more complex as verification includes:

The business’s official registration documents
Proof of physical business address
Identification and proof of address for every director, member, trustee, or authorised signatory of the legal entity
A company resolution confirming who is authorised to act on behalf of the entity

If you live with someone else or don’t have proof of residence in your own name, you may be asked to submit:

A declaration of residence whereby

The owner’s ID and proof of address will be required and
A letter confirming your residency at that address by the owner

FICA compliance is necessary when

Transacting with any of the accountable institutions, i.e. a property practitioner, an attorney, a financial institution etc
Opening a bank account
Applying for a home loan, credit or a hire purchase
Purchasing or transferring property

For example, when a person/entity buys a property and needs a bond to finance the transaction, by law, all the accountable institutions involved with the transaction will each have to FICA the purchaser/entity respectively.

How to search for an individual/entity, click: Targeted Financial Sanctions Search

Should any questions or requests regarding customer due diligence be met with vague or unsatisfactory answers, it is the duty of the accountability entity to file a report with the FIC. If such a report is made about a person, the accountability institution is prohibited from telling the person about the report made.

How to report a suspicious transaction report (STR) to FIC online

Click on User guide – How to submit a suspicious transaction report (STR) – FIC

or login into their goAML portal

The four primary regulatory reporting sections are